Nvidia To License Graphics Technology – Major Business Model Change
NVIDIA announced via their blog that they will expand their business model by offering customers the ability to license their GPU cores and/or visual computing patent portfolio. This is a clear sign that NVIDIA will be licensing chip technology to third parties as a way of more efficiently addressing the expanding demand for GPU technology in the mobile marketplace. Back in the summer of 2012 it was reported that Imagination Technologies PowerVR GPUs had control of 78% of the mobile GPU market. Imagination Technologies seems to be ruling the mobile GPU market, but NVIDIA wants to be number one in that market space. Get ready for a battle as it looks like NVIDIA is planning on no longer being just a fabless chip designer. It looks like they are trying to adopt part of ARM’s business model and is also going to be licensing the technologies that they are developing. By doing this they can look at Apple, HTC, Samsung and others as potential customers. NVIDIA plans to start by licensing its Kepler GPU architecture. You might be thinking how will a high-end desktop GPU help NVIDIA in the mobile market, but NVIDIA’s next-generation Tegra mobile processor codenamed Logan uses a Kepler design.
NVIDIA also recently hired Bob Feldstein from rival Advanced Micro Devices (AMD) and he was part of the team that licensed ATI Radeon graphics and helped get them into the Microsoft Xbox 360 and Nintendo Wii game consoles. We expect that NVIDIA will be using Mr Feldstein and others to help win some licensing deals in a number of industries.
PC sales are declining with the rise of smartphones and tablets. High-definition screens are proliferating, showing up on most every machine. Android is increasingly pervasive. Yesterdays PC industry, which produced several hundred million units a year, will soon become a computing-devices industry that produces many billions of units a year. And visual computing is at the epicenter of it all.
The consequences of these changes are apparent everywhere. New industry leaders are emerging. Companies differentiate not only on products but on business models. Some create systems from industry-standard chips. Others are vertically integrated and build their own chips, systems, software and even services. Some do both.
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